Fresh supermarket industry data from Kantar Worldpanel has shown growth is at the 'lowest level for at least 11 years'.

Figures for the 12 weeks ending April 27th show the British grocery market grew just 1.9%, which Kantar said was caused by intensifying price competition among the supermarkets and a resulting drop in price inflation.

Among the big four, Asda has proved the most resilient in holding onto market share, holding its 17.3% market share and narrowly beating the market with 2.0% year-on-year growth.

Kantar data showed Tesco, Sainsbury and Morrison all suffered declines in their market share, with Tesco and Morrison recorded a fall in actual sales.

"There are clear signs that the major supermarkets are reviewing their strategies in the face of increasing competition," said Kantar Director Ed Garner.

"We're now seeing the big four moving away from 'here today, gone tomorrow' promotions and toward everyday low prices - with Tesco, Morrisons and Asda all announcing price cuts this month."

Meanwhile, in its final results release on Wednesday Sainsbury did not announce any investment in pricing and in a conference call with analysts, outgoing boss Justin King reiterated the group's position. King stated that Sainsbury was "ready to react" if it sees any meaningful changes in like-for-like sales.

Kantar said the proportion of sales on promotion stands at 45% among the big four grocery groups, while the figure at discounter Aldi was just 3%.

The slogans at the big supermarkets reinforced the new paradigm: Tesco states 'Prices down and staying down', Asda has a 'Price lock', while Morrison introduced 'I'm Cheaper - everyday low prices' and the Co-operative has adopted 'Fair and Square' pricing.

"Lower prices across the board is great for shoppers, but has driven down market growth to its lowest level in 11 years," said Garner.

Reflecting intensifying price competition, grocery inflation has shown its seventh successive fall and now stands at 1.5% for the same 12-week period ending 27 April 2014, the lowest level since June 2010.

Waitrose, Aldi and Lidl all achieved new record market shares this period with 5.1%, 4.7% and 3.5% respectively. Aldi's sales growth rate of 36.1% is an all-time record for the retailer and Lidl's 20.9% growth is its highest since August 2004.

Shares in the listed supermarkets took a hit on Wednesday, with Sainsbury erasing early gains to fall 3.08% to 323.11p by 14:10, Tesco down 1.11% to 284.6p and Morrison down 1.8% to 189.3p.

OH

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